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Oil & Gas UK estimates 120,000 job losses in sector since 2014

14 June 2016

Industry trade body Oil & Gas UK says jobs supported by the UK’s offshore oil and gas industry, currently under the severe strain of continued low oil prices, will have fallen by the end of 2016 by an estimated 120,000 since their peak in 2014. The analysis, carried out by marketing services company Experian, forecasts that in 2016 just over 330,000 jobs in the UK will be supported by oil and gas production.

These jobs are across the whole country and cover:* Direct employment provided by companies involved in the extraction of crude oil and natural gas and supply chain companies who directly support this activity* Indirect employment across the extensive supply chain which also exports goods and services overseas* Induced jobs created by the sector’s spending in the wider economy, such as in hotels, catering and taxis.

Brent crude is currently trading at around $50 a barrel, less than half the price it was in 2014 when jobs linked to the sector peaked at over 450,000. Jobs supported fell by an estimated 84,000 to around 370,000 in 2015, and are forecast to have fallen a further 40,000 by the end of this year.

Deirdre Michie, chief executive of Oil & Gas UK, said: “We cannot underestimate the impact the global downturn in the industry is having on the UK economy, nor the personal toll for those who have lost their jobs, and the effect on their families and colleagues. We recognise this and are doing everything we can to support these people, working with the UK and Scottish Governments through their task forces to find suitable alternative employment, as well as with the unions as we go through these difficult times.

“The industry has been spending more than it is earning since the oil price slump towards the end of 2014. This is not sustainable and companies have been faced with some very difficult decisions. To survive, the industry has had no choice but to improve its performance. It is looking to find efficiencies to restore competitiveness, to attract investment and stimulate activity in the North Sea. With up to 20 billion barrels of oil and gas still to recover, this region is still very much open for business.”

The industry will be coming together on June 14 at Oil & Gas UK’s Annual Conference in Aberdeen to consider how it manages its way safely through the current downturn and how it can emerge in a competitive form that will safeguard the 330,000 plus jobs it still supports.

“330,000 jobs is still a significant number,” adds Deirdre Michie, “but the total employment we will sustainably provide depends on the level of investment attracted into the basin. If investment falls, then so will jobs. The interventions we make now will be critical to shape the industry’s direction and help stem future losses.